Ohio Intel project sparks housing fears in tight market

Ohio Intel project sparks housing fears in tight market

Intel’s announcement earlier this year of a $20 billion manufacturing operation bringing thousands of jobs to rural Ohio was greeted as an economic boon.

But behind this enthusiasm lurked a pressing question.

“Where are we going to put everyone?” asked Melissa Humbert-Washington, vice president of programs and services at Homes for Families, which helps low-wage workers find housing in an area that already has a severe shortage.

Intel says its first two computer chip factories will employ 3,000 people when the operation becomes operational in 2025. The project is also expected to employ 7,000 construction workers. And none of this includes the hundreds of additional jobs as Intel suppliers move in, as well as the expected boom in the service sector.

Such housing challenges arise across the country as companies are increasingly criticized for failing to consider the housing needs of their new employees or the impact major developments will have on markets. housing already strained.

Experts agree that years of underbuilding dating back to the Great Recession of 2008 have caused widespread housing shortages. Nationally, the country is about 1 million homes short, according to Rob Dietz, senior economist at the National Association of Home Builders. The National Apartment Association estimates a rental shortage of around 600,000 units.

“We’ve underbuilt housing by millions of homes over the past 15 years,” said Dennis Shea, executive director of the J. Ronald Terwilliger Center for Housing Policy. “So when a big company comes into a community where there is limited supply, the demand that they are going to inject … is going to affect house prices and rental prices because there is more demand than supply. “

For the impact of big business on housing, look no further than Intel’s own operations in Chandler, Arizona, which grew from a small farming town of about 30,000 people in 1980 when the company built its first factory in a high-tech metropolis of today’s 220,000 people. This has been accompanied by phenomenal housing growth, and today Chandler lacks developable land, with nearly 95% of the area built up with residential, office, industrial and commercial projects, according to the Greater Phoenix Economic. Council.

Housing is also more expensive in Chandler, with a median sale price of $525,000 compared to $455,000 in greater Phoenix, and median rents of $2,027 compared to $1,950 in Phoenix.

The challenge for areas like rural Ohio is that they don’t have local employees to build or staff a big project, said Mark Stapp, director of Arizona’s Center for Real Estate Theory and Practice. State University. There is neither the housing nor the infrastructure to accommodate the thousands of newcomers, driving up housing prices and possibly forcing existing residents to leave.

“It’s economic development. He will employ people. But you’re probably going to have to bring a lot of people into the area,” he said. And “these jobs require housing”.

“If you don’t recognize this and plan infrastructure, land use policies properly and manage this growth, it can be a big problem. The big opportunity turns into a big problem.

In central Ohio, Intel’s site stands on hundreds of acres of rural land once occupied by agricultural fields and modest homes where large business parks have also sprung up near main arteries. The region averaged about 8,200 building permits per year for single-family and multi-unit buildings, even as estimates of job and population growth prior to the Intel project called for more than double that, according to the Building Industry Association of Central Ohio.

“We don’t build enough of anything,” said group executive director Jon Melchi. Central Ohio, with about 2.4 million residents today, will grow to at least 3 million by 2050, the group said.

The shortage in central Ohio includes the “missing middle” of workforce housing, or homes up to $250,000, said Tre’ Giller, CEO and president of Metro Development, the one of Ohio’s largest apartment developers. A recent Zillow search showed only about 570 listings for homes priced at $250,000 or less in the area.

Housing pressure is particularly intense for low-wage workers. Central Ohio already has about 71,000 households considered “very heavily rent-burdened” — families spending more than half of their income on housing, the Coalition on Homelessness and Housing in Ohio said. The area has only 34 affordable housing units available for every 100 low-rent households, he said.

The problem is even worse in Licking County, home to future Intel factories, where more than one in five tenants are considered heavily rent-burdened.

Affordable housing is crucial for the low-wage workers who keep the economy running, from preschool teachers to medical assistants, said COHIO executive director Amy Riegel. But housing must also be considered on a spectrum: Without enough high-end properties to buy, buyers will buy rentals, which will exclude workers of limited means.

“Housing is definitely an ecosystem,” Riegel said. “If you add housing at one end and don’t take care of the other end, it has an impact and a ripple effect on the whole system.”

In the Nov. 8 ballot, Columbus voters approved a $200 million bond issue aimed at increasing the city’s affordable housing stock for homeowners earning less than $50,000 a year. “We just don’t have enough housing for people,” Mayor Andrew Ginther said when announcing the issue in July.

Janna Sharrett is grateful for her apartment in an affordable housing complex in suburban Columbus as the region prepares for the arrival of Intel and its real estate impact. The 60-year-old customer service representative works from home and earns just $14.94 an hour. Her rent for the one-bedroom apartment she shares with her dog, Bella, and cat, Daisy, is $695.

The $6.5 million, 28-unit building where Sharrett lives was developed by Homeport, a Columbus-based nonprofit that works to expand affordable housing. Sharrett moved in two years ago to seek relief from a $1,000 rent payment, and today she doesn’t know what she would do without it.

She worries about the needs of people like her as the region grows through projects like Intel.

“The rent is exorbitant. House prices are exorbitant. And my earnings are not outrageous,” Sharrett said.

Across the country, a growing number of companies are responding to housing concerns by rolling out ambitious plans for thousands of new homes – though efforts fall far short of real needs.

In 2021, Amazon launched its $2 billion Housing Equity Fund to create more than 8,000 affordable homes in three regions where it operates: Puget Sound in Washington state; Arlington, Virginia and Nashville, Tennessee.

In 2019, Apple announced it would commit $2.5 billion to alleviate California’s housing crisis, one of many initiatives by tech companies. This month, Walt Disney World chose a developer to build affordable housing on 80 acres of its land in Orange County, Florida.

Intel also looks forward to partnering with community leaders in Ohio to prepare for increased housing demand over the next few years, Intel spokeswoman Linda Qian said, without providing details.

Experts say it is in Intel’s interest to help alleviate the housing shortage in the region. According to a report by the Affordable Housing Alliance of Central Ohio, employers in Greater Columbus are already attributing high worker turnover and reduced productivity to long commute times.

“Without the housing product, it can easily stifle the labor needs of Intel and others,” said Jamie Green, a Columbus-based planning consultant.

As the Intel project unfolds, it highlights the challenges ahead, said Leah Evans, president and CEO of Homeport, which developed the affordable Sharrett apartment complex.

“It just brought to light that for every job you create, you have a commute and you have a housing unit need,” Evans said. “You have to think about all these things.”


Michael Casey in Boston contributed to this report.

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